A trader using the eBay website to sell goods has been jailed for two years for not paying tax on the income he made.
Other traders have been urged to declare and pay tax on goods sold or run the risk of being prosecuted.
HMRC is cracking down everywhere, and monitoring sales on eBay is just one of these places.
John Woolfenden failed to pay nearly £300,000 tax from his trading business on eBay. In six years, his Globalworldentertainments sold more than 500,000 items, mostly online music and games, valued at £1.4m.
Private traders are responsible for informing HMRC of their earnings and paying tax.
Although there may be a fine line between the occasional sale of personal goods and trading for profit, the determination is usually based on how often a trader sells goods and if that amounts to trading.
"Those who choose to stay under the radar, operating in a cashless economy, but leaving behind a paper trail of transactions, may be in for an unpleasant surprise,” said a fraud prosecutor at the Crown Prosecution Service.
HMRC ran an e-Marketplaces campaign for some months in 2012 to get traders to get their tax affairs sorted out. It raised more than £7.8m in tax as a result.
But the tax authorities have become tougher since then. Last year HMRC brought 915 prosecutions for tax offences and gained 716 convictions.
